U.S. Offshore Wind Power Economic Impact Assessment Issue Date | March 2020 Prepared By American Wind Energy Association Table of Contents Executive Summary ............................................................................................................................................................................. 1 Introduction .......................................................................................................................................................................................... 2 Current Status of U.S. Offshore Wind .......................................................................................................................................................... 2 Lessons from Land-based Wind ...................................................................................................................................................................... 3 Announced Investments in Domestic Infrastructure ............................................................................................................................ 5 Methodology ......................................................................................................................................................................................... 7 Input Assumptions ............................................................................................................................................................................................... 7 Modeling Tool ......................................................................................................................................................................................................... 8 Results ..................................................................................................................................................................................................... 9 Base Offshore Wind Development Scenario ............................................................................................................................................ 9 High Offshore Wind Development Scenario ...........................................................................................................................................11 Conclusion ...........................................................................................................................................................................................13 Endnotes ...............................................................................................................................................................................................15 About AWEA and Report Authors .................................................................................................................................................16 Executive Summary The offshore wind industry is poised for exponential growth in the United States. Market projections anticipate between 20,000 to 30,000 megawatts (MW) of offshore wind capacity will be operational by 20301, representing between $28 – $57 billion of investment in the U.S. economy. In addition to delivering customers with clean, affordable, and reliable power, the offshore wind industry will also contribute a variety of economic benefits to the U.S. economy, including supporting tens of thousands of jobs, billions in economic output, and investment in critical coastal infrastructure. AWEA conducted the following analysis to estimate the potential economic impacts of offshore wind development off the East Coast of the United States through 2030. The analysis considers two scenarios— 1) a base scenario of 20 GW of operating offshore wind power by 2030 and modest local content; and 2) a high scenario of 30 GW of operating offshore wind power by 2030 and increased local content. Our analysis finds that in a high build and high domestic content scenario, offshore wind could support up to 83,000 jobs and deliver $25 billion annually in economic output by 2030. Specifically, this analysis estimates: • The offshore wind industry will invest $28 to $57 billion in the U.S. economy between now and 20302, depending on installation levels and supply chain growth within the U.S. • Offshore wind project development, construction, and operations will support 19,000 to 45,000 jobs by 2025 and 45,000 to 83,000 jobs by 2030. • Investment in the U.S. offshore wind industry will deliver $5.5 to $14.2 billion per year by 2025, and $12.5 to $25.4 billion per year by 2030 in economic output. Summary Results 2025 2030 Operating Offshore Wind Capacity 9 – 14 GW 20 – 30 GW Offshore Wind Jobs 19,000 – 45,000 45,000 – 83,000 Annual Economic Output $5.5 – $14.2 billion $12.5 – $25.4 billion U.S. OFFSHORE WIND POWER ECONOMIC IMPACT ASSESSMENT | 1 Introduction The United States has vast offshore wind energy resources. The areas off our coasts possess an offshore wind potential of more than 2,000 gigawatts (GW)3, or nearly double the nation’s current electricity use.4 This potential presents an enormous opportunity to deliver large amounts of clean, reliable electricity to the country’s largest population centers along the coasts. Harnessing America’s offshore wind resources will also create thousands of jobs, draw new investment to the U.S., revitalize ports and coastal communities, and create opportunities for American manufacturing. Current Status of U.S. Offshore Wind The U.S. currently has one operational offshore wind project with many more on the way. The nation’s first commercial offshore wind project, the Block Island Wind Farm, came online in December 2016. Developed by Deepwater Wind, the Block Island Wind Farm is a 30 megawatt (MW) project with five turbines located three miles off the coast of Block Island, Rhode Island. Looking forward, several projects are now in various stages of development across 15 offshore wind energy leases issued by the Department of Interior’s Bureau of Ocean Energy Management (BOEM). In a December 2018 offshore wind lease auction, three separate wind energy leases each sold for a record $135 million, underscoring robust competition and market interest. In total, all offshore wind lease auctions to date have totaled over $472 million. BOEM is now in the planning stages for areas off California, Hawaii, New York, and South Carolina. East Coast Offshore Wind Projects and Lease Areas MA NY CT RI Bay State Wind Revolution Wind (704 MW) South Fork Wind Farm Vineyard Wind 1 PA (130 MW) (800 MW) Sunrise Wind (880 MW) Park City Wind (804 MW) Vineyard Wind Equinor NJ Empire Wind (816 MW) Mayower Wind (804 MW) Atlantic Shores Oshore Wind DE Ocean Wind (1,100 MW) Ørsted, PSEG MD Skipjack Wind Farm (120 MW) MarWin (269 MW) Unnamed Dominion Energy Project (2,640 MW) VA Coastal Virginia Oshore Wind (12 MW) NC Avangrid Renewables U.S. OFFSHORE WIND POWER ECONOMIC IMPACT ASSESSMENT | 2 State Offshore Wind Targets States along the East Coast are driving demand for However, component manufacturers began investing offshore wind. Connecticut, Maryland, Massachusetts, heavily in domestic manufacturing facilities to serve New Jersey, New York, and Virginia have established the new, growing wind industry. By 2007, 100 domestic targets to procure a total of 25,400 MW of offshore facilities served land-based wind energy. Today, there wind by at least 2035 and have selected over 6,000 MW are over 500 facilities across 42 states manufacturing of projects as of February 2020 to help meet these goals. parts for land-based wind projects and employing a These policies provide certainty for the industry that workforce of over 25,000. While larger components will enable investment and lead to the creation of an are manufactured in states with strong wind resources, American supply chain. hundreds of wind-related manufacturing facilities across the rest of the country make subcomponents for wind States along the East Coast are driving turbines. For example, the Southeast is home to over 100 facilities serving the wind industry despite having minimal demand for offshore wind. wind power installations.5 The growth of the offshore wind industry holds similar Lessons from Land-based Wind promise for U.S. job growth, project construction and operations, and domestic manufacturing. It will also create new opportunities for port revitalization and The history of the land-based wind industry in the U.S. vessel construction. To date, project developers and can provide important insights for how the offshore wind manufacturers have announced planned investments industry may grow. Thanks to technology improvements totaling more than $1.3 billion across a variety of and cost reductions, land-based wind capacity grew from projects including ports and new manufacturing facilities. 2,500 MW in 2000 to over 105,500 MW at the end of While offshore wind projects will be concentrated on 2019. As wind farms spread across the country, so did the East Coast in the early years of the industry, there is wind-related jobs and manufacturing. In the early days an opportunity for economic benefits to spread to other of the U.S. wind industry, many products were imported parts of the country, such as the Gulf Coast. from Europe and other global manufacturing centers. U.S. OFFSHORE WIND POWER ECONOMIC IMPACT ASSESSMENT | 3 Active Wind-Related Manufacturing Facilities Gulf Coast manufacturers and service providers have The offshore wind industry is well-positioned to achieve already been working to support the offshore wind significant